Council urged to show ‘budget discipline’ after financial report card
Adelaide City Council is debating cuts to sponsorships and full-time staff raised in early budget talks in response to being labelled financially unsustainable by a recent review.
Adelaide City Council’s future was ranked potentially unsustainable in a financial report card from the state’s Essential Services Commission (ESCOSA) released last week.
In a meeting of the council’s City Finance and Governance committee on Tuesday, Chief Financial Officer Anthony Spartalis told elected members there were “no surprises” in the financial report card and reiterated the need for budget discipline from the council moving forward.
Councillor Henry Davis said the council need to take accountability for its long-term financial plan and make dramatic changes, suggesting an external consultant come in to be “frank and fearless”.
Lord Mayor Jane Lomax-Smith said the report card was “acceptable” and that the future projections are a warning for the council to “sharpen your pencils and stop giving away money”.
Lomax-Smith said it is “encouraging” that the council’s current performance was marked as mostly sustainable.
Councillors are in early talks for their 2025/26 budget and business plan, and a presentation on Tuesday night identified potential savings including less sponsorships and reduced use of external contractors.
The council sponsorship of the History Festival and the architecture and design award, the City of Adelaide prize, are two sponsorships flagged to be removed, saving $62,000.
There’s a net $670,000 increase in spending on services flagged for council services, including a tree protection officer, accelerated greening, noise monitoring and neighbourhood development funding.
You might like
Council CEO Michael Sedgman said these incremental changes to services are achievable within the budget parameters by cutting spending to these sponsorships as well as areas like Town Hall cleaning, security and advertising, software subscriptions and grants.
Davis suggested they cut the council CEO’s budget for City of Adelaide employees, questioning roles like the marketing and communications team videographer role that was listed to become permanent in the next financial year.
“I think there needs to be a serious look at everyone who is there,” Davis said.
“Could we do an organisation-wide review of the services we provide and look to find and consolidate FTE positions?
“We have a serious problem here, and if we’re going to sharpen our pencils, we don’t need to sharpen the pencil, we need to snap the thing in half.”
Councillor Carmel Noon said this discussion was inappropriate, as council staff report to the CEO, not elected members.
“When it comes to structure, FTEs, having that discussion, that’s not what we do, that’s the CEO’s role,” she said.
No decision has been made to cut staff numbers. The council will hand down their draft budget for community consultation in April.
Adelaide Bridge and Torrens Weir costs
A large part of Adelaide City Council’s financial uncertainty is due to the high replacement costs for the Adelaide Bridge and Torrens Weir, which the council’s long-term financial plan estimates will cost $65.6 million and $44.7 million, respectively.
Stay informed, daily
Adelaide Bridge is nine lanes and 40 metres wide. The council has previously highlighted concerns about its use on Adelaide Oval matchdays. Picture: Thomas Kelsall/InDaily.
One of ESCOSA’s concerns was the council’s assumption that it’ll receive grant funding from the state or federal government to upgrade these assets and only have to pay for 33 per cent of the Weir’s renewal and 75 per cent of the bridge.
Councillor Mary Couros, who voted against the council’s current budget, said the bridge and the weir are “our assets and our problem”.
“We have not addressed this issue, we are living on hope,” she said.
“We are living on hope and praying that this government, or the federal government, will come to the party and save us.”
ESCOSA’s other concern is the cost estimates for the bridge and weir have not been updated since Covid, but Spartalis said on Tuesday that they have been.
“We have updated those values to current-day dollars based on the information we have on what it costs us to renew and implement other assets,” he said.
“We are working through different options which may or may not require the full value,” Spartalis said.
In 2023 the council were told the state heritage-listed bridge spanning the River Torrens on King William Road could deteriorate to an “unsafe level” if it isn’t upgraded or replaced by 2028.
The heritage-listed Torrens Weir was officially opened in 1881. This picture: Experience Adelaide
Spartalis said they accept five of the seven recommendations ESCOSA made in the financial report card, but two of its suggestions aren’t appropriate.
The suggestions the council won’t adopt involve doing more to dispose of their assets, using the proceeds to repay borrowings, and developing a transparent strategy for commercial assets.
Spartalis said they won’t take these recommendations on board because they’re contrary to council policy and would “undermine our ability to operate competitively” if confidential asset deals are made public.
